An exceptional article (be sure to follow and read the links) by Airfare Watchdog’s George Hobica about the travel insurance included with many high-end credit cards asks two very valid questions: Why buy travel insurance at all? Why not let the credit card do the heavy lifting?
Not to steal George’s thunder, but the answers to those questions are pretty simple. You can, if you want, with some trips that are paid for entirely with a credit card that offers a lot of travel protection, take a trip and let the credit card be your safety blanket. But there are gaps in most of the cards’ coverages, the actual coverage package can vary greatly from card to card, and what they protect may not line up well with your particular trip.
Let’s start with the card that offers travelers some of the most comprehensive coverage, the United Explorer Visa Platinum card. It offers a nice travel protection package gratis (gratis if you don’t count the $95 annual fee that kicks in after the first year, that is).
Its $10,000 trip-cancelation benefit is great for big, long trips, even though it’s largely unnecessary for most of the traveling people do. And, like all credit-card-supplied coverage, it requires you to pay for most or all of the trip with your card.
The United Explorer Platinum Visa has a broad definition of who a covered family member is, including siblings-in-law, nieces and nephews. If you’re traveling alone, with your partner or with your immediate family it’s less of a selling point, but for a family cruise or trip to Disney it’s worth the card’s annual fee, and then some.
The card pays up to $3,000 a person for lost luggage, but only up to $500 for each covered person for the stuff that really adds up – jewelry and electronics. This coverage only kicks in after you’ve submitted a loss report to the airline, it requires receipts, and it includes depreciation. So while the coverage sounds great, it’s a little less impressive in action.
The baggage-delay coverage pays up to $100 a day for a maximum of three days to buy essentials, like personal items or a phone charger. You’ll need to substantiate your purchases, so save receipts or use the card to buy your replacement items.
Always remember what isn’t covered through the card – most notably, flight delays, tarmac delays, and missed connections – and also remember that this is among the best coverage offered by any credit card. Credit-card travel-protection coverage drops off from here. Also, as its name implies, the United Explorer Visa offers extra perks to travelers who fly United frequently. If you’re a Southwest fan and want a side of travel protection with your credit card, you may want to try the Chase Sapphire card or something similar.
However, no matter which credit-card-plus-travel-protection you choose, take its protection in context. View the coverage as an add-on to other coverage. It especially works well when used in conjunction with a plan like AirCare. As Hobica points out in one of the links, AirCare plus credit-card-supplied coverage can deliver a broad spectrum of protection for only the modest $25 cost of AirCare.
If you have one of these cards and are planning a trip, here are a few suggestions:
1) Unless you have a strong reason not to, use the card to pay for as much of the trip as you can. While it isn’t true with all the cards, in general the more you put on the card the more that will be covered.
2) Save receipts. The more documentation you have the easier it will be to substantiate claims. Store e-receipts in a dedicated folder.
3) Buy AirCare. It meshes well with credit-card-supplied travel coverage, and it’s only $25. The credit-card coverage will take care of the catastrophic stuff, while AirCare will pay you for common travel problems.
If you’re not sure whether your credit card offers trip protection, read the fine print of your credit-card agreement. It may be some of the most lucrative fine print you’ll ever read.